For a Firm That Uses the Weighted Average Method of Process

question 114

Multiple Choice

For a firm that uses the weighted average method of process costing,which of the following must be true?

• A)Physical units must be greater than or equal to equivalent units.
• B)Equivalent units must be greater than or equal to physical units.
• C)Physical units must be equal to equivalent units.
• D)Physical units can be greater than or less than equivalent units.

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Definitions:

Beginning Inventory

The value of a company’s inventory at the start of an accounting period, carried over from the end of the previous period.

Periodic Inventory System

An accounting method where inventory and cost of goods sold are determined at the end of a period through a physical count.

FIFO Inventory

A method of inventory valuation where the first items produced or acquired are the first ones sold, FIFO stands for "First In, First Out."

Cost of Goods Sold

The total cost of all raw materials, labor, and overhead expenses incurred to produced goods that were sold during a particular period.